Published tribunal order
Tenancy Tribunal case 4511930 — Exemplary damages at 63B Lake Road, Devonport, Auckland 0624
Decided 22 Aug 2023 · Published 22 Aug 2023 · Application 4511930
- Exemplary damages
Party names are redacted in the official published order.
Order
- An application for suppression has been made in this case, and the Tribunal orders suppression of the Tenant’s name and identifying details.
- The Tribunal declares that the termination notice issued on 28 September 2022 is a retaliatory termination notice.
- The notice of rent increase sent by the landlord via text on 28 June 2022 is declared to be invalid.
Reasons
- Both parties attended the hearing. The tenant attended along with a support person and Jane Lu attended on behalf of the landlord. Ms Lu is the owner’s wife but has been managing the property throughout.
- This was a rehearing of a matter that was first determined by Adjudicator Woodhouse on 4 October 2022. DescriptionLandlordTenant Exemplary damages: retaliatory notice$1,500.00 Total award Bond $1,260.00
- The landlord did not attend the earlier hearing. At that time, the termination notice dated 28 September 2022 was declared to be retaliatory and exemplary damages were ordered. The rent increase was also declared to be invalid. The tenant’s claim of a breach of quiet enjoyment was dismissed.
- Later, the landlord filed an application for rehearing on the basis that they were unaware of the hearing date. The Tribunal accepted that there had indeed been a typographical error in the email address provided and so a rehearing was granted.
- Today, I must approach the matter afresh.
- I note that the tenant has also filed a further application alleging that the landlord has failed to take all reasonable steps to prevent a breach of quiet enjoyment. Because the new application is largely the same as the earlier one (although with evidence that post-dates 4 October 2022) I will deal with that as one claim.
- I also observe that at the hearing today the tenant confirmed that he has now moved out of the premises as of 28 March 2023. This was in response to a new notice of rent increase received in February 2023. I note this is not the increase that is the subject of the claim before the Tribunal. Background
- The background was helpfully summarised in Adjudicator Woodhouse’s earlier decision as follows. The tenancy commenced on 19 November 2021 as a fixed term tenancy until 18 August 2022. The original landlord was [the former landlord], however in May 2022 the premises were sold to Mr Fadi Daoud... The rental for the premises is $420.00 per week, but [The tenant/s] states that rental included water. [The tenant/s] described the tenancy premises, as premises in a complex of commercial and residential units. On the ground level are three commercial units, including a pharmacy. Upstairs is [The tenant/s]’s one bedroom unit, and next to that is a 3-bedroom unit that is rented to a group of young people. [The tenant/s] describes a long history of the neighbours causing disturbances which he raised with the landlord, and which have been the subject of a number of complaints to noise control. [The tenant/s] states that the previous landlord had to put those tenants on a final warning. Around 28 June the landlord sent a text message to the tenant stating that at the time of renewing the tenancy, they would need to look at increasing the rent as it was not a market rate and taking the rent to around $595 including water. On 2 July 2022, the landlord sent an email to the tenant stating: Further to our phone conversation, I will write to give you a 90-day notice per requirements of tenancy legislation for non-renewal of the current fixed term. Therefore, you will be due to vacate from the property after 90 days from today. However, we do not want to put any hardship to you as a Tenant so do please let us know if you need some flexibility, we are happy to help. But as I advised that long run we will need to increase the rent to $595 per week with water included. Please feel free to call or email me if you have any questions. On 19 July 2022 the tenant issued a 14-day notice to the landlord: As per my contract (fixed term) not allowing quiet enjoyment of the premises...also in the contract tenants agree to no disturb the neighbours or the landlord’s other tenants. Please remedy this by doing the following: Communicate with tenants at 63b and sort out the parking problems they create. Tenants need to respect privacy of neighbours. If I don’t hear from you and you don’t remedy the situation by 02/08/2022 (at least 14 days from but not including today), I may apply to the Tenancy Tribunal). On 30 August 2022, the tenant filed this application with the Tenancy Tribunal. On 28 September 2022 the landlord sent an email stating: Please see attached the 90-day notice for ending the tenancy of 63B Lake Road, Devonport, Auckland 0624. We have decided to convert the property to commercial use and substantial renovation work will take place so please make sure to vacate the property no later than December 28, 2022. Attached to the email was a standard Tenancy Services termination notice form. This records the date of termination to be 28 December 2022. The form has the following boxes ticked: The premises are to be converted into commercial premises for at least 90 days by the landlord or owner. Extensive alterations, refurbishment, repairs, or redevelopment of the premises are to be carried out by the landlord or owner, and it would not be reasonably practicable for the tenant to live there while the work is done. The work must begin, or material steps towards it are to be taken, within 90 days after the termination date. Summary of Tenant Evidence
- The tenant said that in essence he felt that multiple actions by the landlord were “retaliatory” in the dictionary sense of the word. That is, not only the termination notices but also the attempt to raise the rent, and the landlord’s regular accusations against him whenever he tried to raise complaints regarding issues with the neighbours.
- The tenant said that he met the new owners just prior to their purchasing the property. At that point he had just started a 9-month fixed term tenancy.
- He said that when he saw them again after they purchased the property, he asked if they had any plans for the place, including whether they intended to put any family in the premises, to which they assured him they did not.
- The tenant said that he frequently complained to the landlord about problems with the neighbouring tenants. Two primary issues were recurrent themes. The first was that they would park in the wrong place at the wrong time. The second was inappropriate and excessive noise amounting to a breach of quiet enjoyment.
- According to the tenant (and the landlord agrees) the arrangement was that the parking spaces behind the building were reserved for the commercial tenants. The residential tenants were permitted to park in those spaces only after hours.
- The tenant said that he strictly followed this rule, but the neighbours did not. Consequently, there were issues when the commercial tenants would become upset if the parking spaces were occupied. It also led to issues where the neighbours would park in such a way that encroached on his parking space.
- The tenant further said that the neighbours would frequently make excessive noise, which affected his ability to sleep. He said that this would happen frequently, at least every couple of weeks. The noise was said to be loud music and voices, essentially “partying” behaviour, often late at night or in the early hours of the morning. The tenant said that the neighbours were frequently intoxicated. He indicated that he himself had been young once and it wasn’t this per se that was the problem; but rather their inconsiderate noise that disturbed him.
- He said he complained frequently to the landlord, and also rang noise control on at least six occasions. The dates he provided for calls to noise control were: 15 May 2022 at 2am, 2 July 2022 at 10pm, 2 July 2022 at midnight, 3 December 2022 at 7.30pm, 11 December 2022 at midnight, 12 February 2023 at 2:39am.
- As noted above, the tenant issued the landlord with a 14-day breach notice dated 19 July 2022.
- The tenant said that each time he complained to the landlord, the tenants would quieten down, or stop parking in the wrong place, for a week or two, but then the behaviour would start again.
- The tenant said that he had already raised these issues with the pervious owner of the property, who had advised that the neighbouring tenants were on a “final warning” before termination.
- The tenant said that when he kept raising issues about the neighbours, the landlord indicated that she was concerned that the neighbours had mentioned taking advice from a lawyer. She said that she did not want to “push them too far” regarding the complaints because they could not afford to be without the rental income from that premises.
- Insofar as the termination notices, the tenant said that he felt both notices were retaliatory, because the timing on both occasions seemed to coincide with raising an issue (for example filing in the Tribunal) or making a complaint about something.
- Insofar as the rent increase, the tenant said that he had sought advice that the landlord was not able to raise the rent and he did not think the landlord had complied with the law. Summary of Landlord Evidence
- The landlord says that she and her husband purchased the premises in May 2022. Her husband is located mainly in Dubai and so she has been the primary contact for the tenants and has managed the property.
- She said that she and her husband purchased the premises with the idea of eventually converting both residential premises into commercial spaces. She says that they had that vision when they first purchased the building.
- She said that [The tenant/s] was a really good tenant, and she had no reason to act in the way he has described. She said that she and her husband had a number of other tenancies and that he was definitely one of their better tenants, looking after the property and keeping to himself. She said that she had sympathy for him and his situation, having been a renter herself.
- She said that she was quite new to managing properties and was not fully aware of all her legal obligations. She said that the tenant had in effect “educated” her about various legal issues. She also said that the mediation had allowed her to learn a lot about what her obligations were.
- She said that after during the mediation she had been advised that there were only a few reasons to validly terminate, one of which was converting to commercial premises.
- She said that when she heard that, she thought to herself, well we were going to do that anyway, so that’s good we can go ahead and terminate.
- She said that is why the second termination notice was issued following mediation.
- She denied that she had done this in retaliation and said that the reason cited was genuine.
- Since the tenant has moved out, the landlord says work has been done to convert the premises to a cattery and vet clinic, named Furry Friends.
- She provided photographs showing some work done, including removing carpets and laying waterproof flooring and partitioning the rooms into smaller spaces for the cattery.
- She accepted that [The tenant/s]’s neighbours (of whom he had complained) were still living in their unit but said there is also an intention to convert that to commercial premises in due course, however they could not afford to do it all at one so have started with [The tenant/s]’s unit.
- In relation to breach of quiet enjoyment, the landlord said that her approach to the complaints regarding the neighbours, or anyone for that matter, was to deal with matters with “respect and sympathy” and she tended to favour an informal approach.
- She said that she emailed and texted the neighbours and reminded them of their need to be considerate of [The tenant/s]. She said that she had done all she could in the circumstances. Findings Retaliatory Notice
- Section 54 of the Residential Tenancies Act 1986 (“the Act”) provides that the Tribunal may declare a notice to terminate a tenancy to be retaliatory if: Within 28 working days after receipt of a notice terminating the tenancy, being a notice that complies with the requirements of section 51 (or, in the case of a boarding house tenancy, section 66U), the tenant may apply to the Tribunal for an order declaring that the notice is of no effect on the ground that, in giving the notice, the landlord was motivated wholly or partly by the exercise or proposed exercise by the tenant of any right, power, authority, or remedy conferred on the tenant by the tenancy agreement or by this or any other Act or any complaint by the tenant against the landlord relating to the tenancy.
- For a notice to be declared retaliatory, the tenant must prove that in terminating the tenancy, the landlord was motivated wholly or partly by the tenant exercising a right under the tenancy agreement or any Act, or by any complaint against the landlord. See section 54(1) of the Act.
- The essential element of a retaliatory notice is the issuing of it in response to a tenant asserting a right, but it need not be the sole motivation, provided the landlord was partially motivated by the tenant asserting the right.
- The Tribunal in Easton v Marks Auckland TT 229/87, 27 May 1987 considered the meaning of the verb “motivate”. It considered the Webster’s dictionary definition “to furnish with a motive or motives; to give impetus to; to insight; to impel” and held that the landlord was not incited or impelled by the tenant’s actions. The Tribunal in that case noted that: “It is one thing to say that an owner of a property has grown somewhat tired of his property being tenanted to persons, it is another thing to say that the tenants gave impetus to, or incited, or impelled the owner to give the notice to quit.”
- In relation to the first notice dated 2 July 2022 I cannot consider whether that is retaliatory. That is because a tenant needs to apply within 28 working days of that notice, and the tenant made his application to the Tribunal on 30 August 2022.
- I turn now to consider the second notice, dated 28 September 2022.
- On the face of it, the notice says that there is an intention to convert the premises to commercial use. That is a valid reason under the Act.
- However, the tenant says that during mediation the mediator identified the earlier notice as not being lawful and it was because of that the second notice was issued. The landlord accepted that narrative, stating that when the mediator advised her of valid reasons to terminate (one of which was conversion to commercial premises) she realised that was an available option to her.
- I accept that there was a long-term intention to convert the premises to commercial use. I also accept that, since the tenant has vacated, work has started on that process.
- However, what I must consider is whether the giving of the termination notice was partially motivated by the tenant asserting his rights.
- In this case, based on the evidence I have heard, I consider it is more likely than not that the termination notice was partially motivated by the tenant asserting his rights. The landlord accepted that she essentially fixed on that as a way to “lawfully” terminate when she was told that by the mediator. There is no evidence that prior to the mediation there were clear plans in place to convert to commercial use; rather it comes across as a vague plan that sprung to fruition only once the idea was posited by the mediator.
- Because the tenancy has now ended, I find that the notice was retaliatory but there is no need to set it aside.
- The question then becomes whether exemplary damages should be ordered.
- Exemplary damages are designed to punish and deter. They are like a fine. In Auckland City Council v Blundell [1986] NZLR 732 the Court of Appeal stated: Exemplary and punitive [damages] are different words for the same thing. The damages are exemplary because they are meant to teach an example to the guilty officer and others. They are punitive because they are meant to punish. They are like a fine, though they go to the citizen who has been the victim of conduct.
- Exemplary damages are awarded at the Tribunal’s discretion when one party has proved that the other party has committed a defined unlawful act.
- Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest. See section 109(3) of the Act.
- Intentional means that the party who has committed the breach must be aware of it. The focus of the intention however must be the act (or omission) and not the legal knowledge of the offending party. The District Court has confirmed that: Like all citizens... [the landlord is]... deemed to know the law and on that basis a failure to provide these fundamental documents is properly seen as intentional. Parliament’s intention would be subverted if landlords were able to escape consequences for the unlawful acts involved by claiming ignorance of the law. 1
- In this case, I have determined that: a. It is more likely than not that the established breach was intentional. I make this finding bearing in mind the fact that it came so soon after the mediation took place. b. There has been a significant detrimental impact on the tenant who faced the stressful prospect of losing his tenancy. c. There is a strong interest for tenants and landlords and the public generally to ensure that termination notices are given for valid and genuine reasons. d. It would be just to make an order
- The maximum available for giving a retaliatory notice is $6500.00.
- In this case, I accept that the landlord is a relative novice, but nevertheless there is an expectation that landlords, who are running a business, are expected to operate within the law. I have taken that into account however in making an order which falls just below one-third of the maximum.
- I therefore order the landlord to pay the tenant $1500.00 by way of exemplary damages. 1 TMT NZ Ltd TA Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182, at para 37 Breach of Quiet Enjoyment
- A landlord has an obligation to “take all reasonable steps to ensure that none of the landlord’s other tenants causes or permits any interference with the reasonable peace, comfort, or privacy of the tenant in the use of the premises”.
- In this case, despite a lengthy history of problems with the tenant’s neighbours and a multitude of complaints, nothing was done by the landlord other than to remind them to be considerate.
- This is despite the evidence showing that the previous landlord has already indicated that the neighbours were on a “final warning” in respect of their behaviour.
- Although I sympathise with the landlord’s desire to be non-confrontational and to prefer an informal approach, in this case that was insufficient and this should have been clear to her given the ongoing nature of the complaints made by the tenant.
- When informal approaches continued to fail, the next reasonable step the landlord ought to have taken was to issue breach notices to the other tenants. That would have made it clear to them that the behaviour was being taken seriously and that, if not remedied, may result in termination of their tenancy.
- This was not done. That was not reasonable.
- Having considered all the evidence, I am satisfied that the tenant has established that the landlord did not take all reasonable steps to prevent his neighbours interfering with his quiet enjoyment.
- As a result, the tenant says he was constantly stressed, had difficulty sleeping at times and was simply unable to enjoy the amenity he was paying for.
- I consider that it is appropriate to compensate the tenant for the loss of amenity and I therefore order the landlord to pay $1000.00 by way of compensation. Suppression and Filing Fee
- Section 95A of the Act provides that on the application of a party that has been wholly or substantially successful in proceedings the Tribunal must order that the name or identifying particulars not be published, unless the Tribunal considers that it is in the public interest to publish the names of the parties or is justified because of the parties conduct or any other circumstances of the case.
- In this case, the tenant has wholly succeeded in the proceedings. As there are no countervailing reasons not to do so, I therefore grant suppression of his name and identifying details.
- Because the tenant has wholly succeeded with the claim, I must reimburse the filing fee.
- Finally, I apologise to both parties for the delay in issuing this decision. J R Smith 15 August 2023